A senior British lawmaker has raised concerns that growing reliance on dollar denominated stablecoins could give Washington unprecedented control over UK commerce, warning that the current regulatory approach fails to address these geopolitical risks.
During a House of Lords committee debate on new cryptocurrency legislation this week, Liberal Democrat peer Baroness Kramer cautioned that the government’s thinking had been “much impacted by its membership of the joint UK-US Transatlantic Task Force for Markets of the Future,” which she said “has been guided and driven by the Trump Administration’s desire to use financial instruments as a means of extraterritorial control.”
Kramer pointed to recent discussions at Davos, saying “anybody who was at Davos and spent five minutes with US Treasury Secretary Bessent would have quickly understood that crypto and stablecoin are indeed instruments that, in the same way, offer great potential to advance US economic interests globally and for forms of what I think Mark Carney would probably have called financial coercion.” The peer highlighted the recent strengthening of OFAC (the Office of Foreign Assets Control) within the US Treasury, suggesting that crypto and stablecoins are “very much part of that strategy.”
In a follow up comment to the government whip’s response, Baroness Kramer laid out the strategic vulnerability: “If we are dependent on dollar stablecoin for international trade, which is the direction of travel, and the US Government decide that they do not like either a policy that we have or a piece of trade, they can, through the companies that sit behind that stablecoin, in effect shut us down and cut us out. That is a very different set of circumstances from those in which we live today, where they might want to do that, but they cannot. They may try to make banks act in the way that they want, but they would have a far more challenging job in doing that. I am just concerned that that thinking is not embedded in the way that we are structuring this and doing the regulation.”
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